Deep tech offers society the opportunity to solve entrenched problems in health care, urban mobility, and other areas, but commercialization of deep tech is a high-risk venture that requires massive investments. The long gestation period means returns are slow to materialize, unlike for general consumer tech.
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Across Southeast Asia, Singapore has one of the most advanced startup ecosystems, but deep-tech investments are still few and far between. There aren’t many venture capital firms that are keen on funding startups in this sector. Instead, governments are stepping in to invest aspiring deep-tech developers.
SGInnovate, a government-owned investment firm, recently released a paper titled “Deep Tech Investments: Realising the Potential,” which examines the differences between deep tech and general tech, as well as the challenges, risks, and rewards that lie within investments in deep tech. In particular, the report mentions the following points.
Singapore lacks experienced people who can commercialize deep tech
Singapore’s deep-tech ecosystem is not held back by a lack of research or interest. In fact, approximately S$60 billion (US$43.3 billion) has been invested in hard sciences and engineering since 1995. In 2017, it was estimated that Singapore had more than 35,000 research scientists and engineers working in the city-state.
Rather, it is the lack of experienced people with both industry knowledge and supply chain know-how who can commercialize the technology.
As a result, deep-tech research projects tend to stagnate, prompting Wong Poh Kam, director of the NUS Entrepreneurship Center to describe the ecosystem as “[lacking] the depth and specialization of other high-tech startup hubs.”
Wong recently stepped down from his role at the NUS Entrepreneurship Center to focus on being an angel investor and further develop his research on innovation and entrepreneurship.
In a separate interview with KrAsia, Wong said that the number of patented technologies coming from Singapore is growing. Between 1996 and 2000, 943 patents were granted by the US Patent and Trademark Office to Singaporean inventors. That number rose sharply to 7,171 between 2011 and 2016. Despite the increase in patents, there is still a lack of commercially successful Southeast Asian deep-tech startups compared to Silicon Valley, said Wong.
Deep tech research concentrates on a few key areas
SGInnovate’s report finds that deep tech research projects typically cover fields like life sciences, medical technology, clean technology, renewable energy, and autonomous technology.
During Wong’s interview with KrAsia, he noted that Singapore invests significantly in water technology, specifically membrane technology. This is an area where Singapore has sufficiently advanced technology to make a difference.
One main reason for such heavy investment is to reduce Singapore’s reliance on foreign countries for water. The tiny nation has no natural resources and has imported water from Malaysia for many years. But this is unsustainable, prompting the government to channel money into this particular area.
Food tech is another sector that is becoming increasingly popular in Singapore, driven by the urgency to develop food locally due to an expanding population, erratic weather patterns, and an uncertain geopolitical landscape.
Strong government support comes in the form of monetary investments. In January this year, Enterprise Singapore’s investment arm, Seeds Capital, announced a collaboration with seven co-investment partners to invest more than S$90 million (US$65.1 million) into Singapore-based early-stage agrifood tech startups.
The city-state lacks a sophisticated deep tech investing community
The Singaporean government is the biggest investor
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